What Can Hawaii Expect From NextEra’s Purchase of Hawaiian Electric?

NextEra’s announcement of its deal to purchase Hawaiian Electric Company came with some fanfare heralding it as a triumph for a renewable energy future.

"We are proud that Hawaiian Electric has agreed to join our company in large part because of our shared vision to bring cleaner, renewable energy to Hawaii,” said chairman and CEO Jim Robo in a press release.

“You can think about Hawaii as a postcard from the future of what’s going to happen in the electric industry in the United States,” Robo was quoted as saying by Bloomberg.

"In NextEra Energy, Hawaiian Electric is gaining a trusted partner that can help the company accelerate its plans to achieve the clean energy future we all want for Hawaii. NextEra Energy and Hawaiian Electric share a common vision [of] a more affordable clean energy future for Hawaii,” said Connie Lau, president and CEO of HEI.

But is this rosy solar future of sunshine and rainbows really what Hawaiian ratepayers can expect? Let’s take a deeper look at the record.

NextEra owns two affiliates. One is NextEra Energy Resources, which is one of the largest developers and owners of renewable energy in the country, with a projected 2016 total of 4.3 gigawatts of wind and solar generating plants in places from Canada to California. It’s truly a renewable energy powerhouse and a credit to the nation.

The second is Florida Power and Light, a utility with 4.7 million customers -- and only about 1,500 of them with solar on their roofs. While the utility's TV ads prominently feature shiny solar energy projects, just 0.06 percent of FP&L’s energy mix comes from solar (leading U.S. utilities are on track to meet 10 percent of their power needs with solar). Florida ranks 29th in the country for overall renewable development, most of which is from landfill gas and wood-burning. In other words, it’s a renewable desert.

The stone-cold stats show that Florida -- the “Sunshine State” -- is one of the worst markets for solar in the country. New Jersey kicks its butt. Georgia, its neighbor to the north, is dominating it in new solar development.

Why? It’s not for lack of sunshine; it’s lack of policy. Florida has no renewable standard -- FP&L has crushed every effort to establish one. Third-party power-purchase agreements, the most popular way of financing rooftop solar in the country, are not allowed in Florida -- and every effort to change that has been fought tooth and nail by FP&L. The utility has mismanaged the state’s rooftop solar rebate program to the point that state regulators recently voted to end the program because it wasn't cost-efficient. If there were an award for Best Squandering of Potential, FP&L would be a shoo-in.

Looking at the record to date, it is fair to conclude that NextEra is a renewable leader -- but only when it is developing projects in other utility service territories. The company has built a strong renewables business in states with strong renewables policy. Meanwhile, its regulated monopoly has fought tooth and nail against those same policies at home in Florida. When it comes to FP&L, the company hasn’t delivered significant renewables itself and has worked to quash customers’ ability to do so on their own.

So which NextEra can Hawaii expect? We don’t have to wait long to find out.

The next six months in Florida will provide a preview. Regulators at the Florida Public Service Commission have ordered a workshop on the future of solar in the state. The legislature's session opens on March 3 and runs 60 days. There will be efforts to expand renewable energy in Florida, as well as to allow for popular third-party solar financing arrangements, reform taxes that are hurting the solar industry, and ensure that customers who choose to invest in solar can reap the full benefit of their investment. NextEra’s response to each of these measures will send a clear message to Hawaiian ratepayers about what they can expect if the merger with HECO is approved.